At last week’s iOS5 introduction the big news across the internet was Apple’s deep OS integration of Twitter. Truth be told, it is an important development, one which makes sense for both Apple and more importantly for Twitter. The move was a typical Apple finesse, threading the wildly competitive social arena needle in a way that gives both Apple and Twitter a distinct edge in their respective battles with Google and Facebook. It is a move that could take Twitter from a well known, but not broadly used product and quickly attract a significant portion of Apple’s 200 million iOS devices to their user base. It will instantly make Apple’s mobile products more effective as a social & curation platforms. It could also facilitate Twitter’s and Apple’s entree into the deals and check in arena or other local services.

But an even more important, although somewhat less noticed, announcement came in the form of the new iMessage. The announcement was nowhere near as widely disseminated receiving a mere 2,470,000 mentions in Google’s index last week  compared to the 145,000,000 mentions that the iOS5/Twitter union brought. Did the crowd miss something (with this exception)? I think so and it was a momentous event. Apple is going after a bigger pie, texting. And it was apparently done with no prior knowledge on the part of the telcos and took them by surprise.

Texting is one of the world’s most popular forms of communication. While somewhere on the order of 13% of the US population use Twitter at least once per month, 72% of adults 18 and older with cell phones send and receive text messages on a daily basis.  But penetration is but half of the story. Usage is also orders of magnitude higher with texting. On average users send 10 texts per day but in the 12-17 demographic it rises to an average of 112 per day. Users embrace their most intimate and connected social circle via texting. Its usage patterns (and the data generated from it) much more closely reflects and predicts user activities than even Facebook or search behaviors. Texting is the ultimate local, social product.

Texting has long been a strong hold of the telcos. For years it is has languished technically while they milked the technology for profit and loyalty. The lack of innovation has not gone unnoticed and last year a number of internet companies (GroupMe, Google’s Disco.com, Huddl, FastSociety and FB’s Beluga) started adding group texting and social features to texting via the internet. But these technology innovations, while needed, still require adding a totally new layer of actions to texting, limiting their appeal to the geeky not the main stream. Texting is ripe for a revolution and Apple is driving a semi-truck into the gaping hole left by the telcos, a hole that can not really satisfied by the Disco’s of the world

Here are some of the announced features of iMessage and given its open, internet backbone any number of other feature could be easily integrated:

• Send Unlimited Text Messages via Wi-Fi
• Group Messaging
• Delivery & Read Receipts
• Secure Encryption
• Seamless integration with the current text app

Apple’s iMessage brings not just innovation but simplicity of innovation to texting. The enhanced functionality is largely automated and any complexity is totally masked by its integration into the iPhone’s existing and simple Messages app. iMessage will transparently use Wifi if available (no text plan needed), allows for a richer media experience, adds additional functionality like group texting and opens up the many  iPad and iPod as clients. It is built upon the “XMPP [protocol which] powers Jabber IM, Google Talk and Apple’s own iChat Server and local iChat IM over Bonjour ” making it easy to integrate texting with a raft of other services. Something that the current generation of texting products barely considers important.

The telcos learned that the sizzle of the internet attracts customers but that texting keeps them coming back.  Apple understands that and has enhanced texting in a way that should instill incredible loyalty amongst all users but particularly younger ones.

Looking at the recent data from Nielsen shows why this younger demographic is so important to Apple’s future:

Kids Today…

• Are the Heaviest Mobile Video Viewers: On average, mobile subscribers ages 12-17 watched 7 hours 13 minutes of mobile video a month in Q4 2010, compared to 4 hours 20 minutes for the general population.
• Are More Receptive to Mobile Advertising than their Elders: More than half (58%) surveyed in September 2010 said they “always” or “sometimes” look at mobile ads.
• Out-Text All Other Age Groups: In Q1 2011, teens 13-17 sent an average of 3,364 mobile texts per month, more than doubling the rate of the next most active texting demo, 18-24 year olds (1,640 texts per month).
• Talk Less on the Phone: Besides seniors 65-plus, teens talk the least on their phones, talking an average of 515 minutes per month in Q1 2011 versus more than 750 minutes among 18-24 year olds.
• Grew Up in the Age of Social Media—and It Shows: While they make up just 7.4 percent of those using social networks, 78.7 percent of 12-17 year olds visited social networks or blogs.
• Watch Less TV than the General Population: The average American watched 34 hours 39 minutes of TV per week in Q4 2010, a year-over-year increase of two minutes. Teens age 12-17 watch the least amount of TV on average (23 hours 41 minutes per week).
• Spend Less Time on their Computers: American 18 year olds averaged 39 hours, 50 minutes online from their home computers, of which 5 hours, 26 minutes was spent streaming online video.

This age group doesn’t just text but  are throwing over their TVs, phone and computers for their mobile devices and they READ the dam ads. This is the truly post PC generation that will make the portable connected device like the iPhone, the mainstream computing platform of tomorrow. Apple is creating the products that speak to these consumption patterns.

Apple may be the one company that can penetrate the walled garden that has existed around texting for so long. They are not beholden to the telcos in the same way as Microsoft or Google (although I suppose Google could solve this problem is they so desired) and they offer an integration with the phone that companies like Disco can’t match. Minimally the new technology will create pressure on the telcos to enhance texting. But it could very well also lead to an unseating of the incumbents and bring more innovation and lower pricing to texting technology.

But in making iMessage a compelling, no-brainer and compelling loyalty play, Apple is not just moving into the territory defined by texting usage but they are cementing their relationship for years to come with the generation that defines the future of computing. Its not just the telcos that need to look over their shoulders.